The New Law and You

Q. I have many health problems, very low income, no health insurance and don’t qualify for Medicaid. Like many people, we are falling through the cracks in the system. Will the new health reform law help people like us before we all go bankrupt?

A. Yes, there is some help now and more later, as provisions of the health care reform measures take effect over the coming months. First, because you have medical conditions and no insurance, you may be able to buy inexpensive coverage through the new law’s Pre-existing Condition Insurance Plan. For details on who’s eligible and how to apply, go to the AARP Bulletin’s Q&A on the high-risk pools and to the government’s new health reform website.

The other option is to check again with your state Medicaid office. A few states are getting a head start on a provision in the law that provides federal money to states to expand Medicaid to cover adults without dependents, who are not disabled or not eligible for Medicare (because they’re under 65 years old).

But unfortunately, the provision expanding Medicaid doesn’t fully take effect until 2014. Many of the 32 million uninsured Americans who gain health coverage under the health care reform law will get it through the expanded Medicaid health insurance program, which covers people with very low incomes.

“A lot of people assume that Medicaid now covers everyone who’s poor, but that’s not always the case,” says Edwin Park, co-director for health policy at the Center on Budget and Policy Priories, a Washington policy research group.

Medicaid is a state-federal partnership, with the federal government picking up part of the bill. The health care reform law now opens the program to millions more people at no additional cost to states, starting in 2014. Instead of paying nearly 40 percent or more of the cost, states will pay nothing for the first three years for those people who enroll under the new eligibility rules.

Although the new law doesn’t take effect until 2014, it allows states to apply now for additional federal Medicaid money, which Connecticut, New Jersey and the District of Columbia have done so far. The extra help is important because many states in a budget crunch are having trouble paying for rising Medicaid costs.

Under the health care reform law, “for the first time, we are getting federal assistance to cover adults without children who are too young for Medicare,” says David Dearborn, a spokesman for the Connecticut Department of Social Services.

He estimates that 5,000 Connecticut residents will be able to enroll in Medicaid who would otherwise have no health insurance, and 45,000 others in a state-funded health plan will be transferred to Medicaid. In all, the state expects to save $53 million, he said.

Currently, Medicaid eligibility varies from state to state, but typically, enrollment is limited to people with incomes significantly below what federal analysts each year decide is a poverty-level income; for a family of four to receive Medicaid, they must have income under $14,400.

Medicaid now doesn’t cover most adults without children unless they are disabled, pregnant or over 65 years old, says Park. (However, states can use their own funds to offer Medicaid coverage to childless adults, and about half the states do.)

The new law allows more people into Medicaid by changing two eligibility criteria in 2014. First, it raises the income limit to about $29,000 for a family of four. Second, it grants Medicaid coverage to adults without dependents, regardless of whether they are disabled or what state they live in, as long as their income is below about $14,000. (Income limits rise slightly as the poverty line is recalculated each year.)

The law also improves Medicaid benefits, which — like eligibility rules — vary by state. In 2014, the benefits package must be equal to the “essential health benefits” that private insurance companies must offer in plans sold in the state insurance purchasing exchanges. These benefits include prescription drugs and mental health coverage.

For those people with low incomes still above the new Medicaid limits, the health reform law provides subsidies to buy insurance on the exchanges.

And to encourage primary care doctors to treat millions more Medicaid patients, the law sweetens their payments. The law nearly doubles the Medicaid payments to equal Medicare payments in 2013 and 2014, at no added cost to states.